Vancouver’s New Direction
Earlier this year, the coastal city of Vancouver, BC, was donned the title of the 2nd most expensive city in the world, just under Hong Kong. Presumably, in light of this event, Vancouver has taken measures to address the population of their city classified within the low to medium income range (a range based on single individual household incomes of $21,500 per year, up to $86,000 combined household income per year) who are struggling in Vancouver’s booming housing market. The top-end of this financial range, a combined household income of $86,000 per year, assuming they are able to save up and make the down payment, can afford a house of approximately $500,000 in value. This may seem quite reasonable, however the benchmark price for a house in the Greater Vancouver residential area, this Februrary, was $670,900, which augmented to a benchmark of $1,042,900 for detached housing.
There is no doubt that these numbers are showing a struggling lower-middle class housing situation in Vancouver. So what’s the answer? While new developments are being investigated by the cit of Vancouver, there is in fact one more development to this story that could lead to an effective re-calibration of Vancouver’s housing market.
There is now a $10,000 tax credit being offered to new home owners. Now, the argument to this credit not being effective for enticing buyers, is actually quite feeble. When you look at this credit objectively, new home buyers can borrow up to $10,000 from a possible relative, or on a line of credit, to make the down payment on their house, and at the end of the year upon receiving a cheque for this tax credit, this initial loan can be paid off, thus solving the issue of up-front down-payments for new home buyers. Will this combination of efforts lead to a more successful solution for low-medium income homes? Join the conversation on Twitter.
photo courtesy of http://ko.fotopedia.com/items/flickr-3913401662